Exercise 17-4 On January 1, 2017, Kingbird Company purchased 13% bonds, having a maturity value of $321,000, for $344,727.36. The bonds provide the bondholders with a 11% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Kingbird Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2017 2018 2019 $342,600 $329,400 $328,400 2020 2021 $330,200 $321,000 (a) (b) (c) Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to record the interest revenue and recognition of fair value for 2017. Prepare the journal entry to record the recognition of fair value for 2018. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Debit Credit No. Date (a) Jan 1, 2017 Account Titles and Explanation Debt Investments 321000 Cash 321000 (b) Dec. 31, 2017 Cash 41,730.00 Debt Investments 3,809.99 Interest Revenue 37,920.01 (To record interest received) Fair Value Adjustment Unrealized Holding Gain or Loss - Equity (To record fair value adjustment) (cDec 31, 2018 Unrealized Holding Gain or Loss - Equity Fair Value Adjustment Accumulated Other Comprehensive Loss Allowance for Loss on Debt Investment Bonds Payable Cash Call Option Common Stock Cost of Goods Sold Debt Investments Dividend Revenue Dividend Receivable Equity Investments Fair Value Adjustment Futures Contract Gain on Sale of Investments Gain on Settlement of Call Option Gain on Settlement of Put Option Interest Expense Interest Receivable Interest Revenue Inventory Investment Income Loss on Impairment Loss on Sale of Investments Loss on Settlement of Call Option Loss on Settlement of Put Option No Entry Notes Payable Paid-in Capital in Excess of Par - Common Stock Put Option Recovery of Loss from Impairment Retained Earnings Sales Revenue Swap Contract Unrealized Holding Gain or Loss - Equity Unrealized Holding Gain or Loss - Income